UBS sees these six factors driving Asian markets in H2 2024

Investing.com-- UBS analysts identified six key factors that will drive Asian markets in the second half of 2024, especially after several major events in the first half of the year, including Japan’s historic rate hike and China’s bumper stimulus measures.

Asian stocks logged a somewhat mixed performance so far in 2024. While China and Japan initially logged strong gains, they were seen running out of steam by June. On the other hand, markets in India and South Korea flourished on the back of economic optimism and hopes of a boom in technology demand. 

UBS outlined six key factors that will drive Asian markets over the next six months.

In July, the brokerage is anticipating the Communist Party of China’s Third Plenum- a key meeting of its political heads, where the country is likely to outline plans for more stimulus measures, especially support for its beleaguered property market. The brokerage said it was positive on Chinese equities.

In August, UBS said growing demand from artificial intelligence was expected to be reflected in bumper second quarter earnings, with tech-heavy markets set to benefit the most from this trend. 

In September, the bank said it expected the U.S. Federal Reserve to begin cutting interest rates, loosening up global monetary conditions and inviting more capital into regional markets. UBS also forecast that regional banks will begin following the Fed’s lead and also loosen policy, making local bonds more attractive.

In October, UBS outlined two factors- expectations for the beginning of a strong, growth-heavy fourth quarter. The brokerage also forecast that the Bank of Japan will hike interest rates for the second time this year during the month, helping the yen recover against the dollar.

In November, the results of the U.S. Presidential Elections are likely to set the stage for policy in the world’s biggest economy, and will also determine its stance towards major Asian economies.